Despite the availability of low-cost houses, many of Klang Valley’s urban poor have yet to be provided with proper homes

SINGLE mum Salimah Habibullah thought her housing problems were over when she was offered a low-cost unit in 2005, after a 10-year wait. Having endured a cramped existence in a longhouse, first in Pandan Indah and then in Ampang, Salimah and her five children were looking forward to better days.

But what should have been a happy occasion turned into a nightmare when she could not manage to get a bank loan for the RM42,000 unit.

“For about one year, I ran from one bank to another, but was refused a loan because my income was less than RM800 a month,” the 38-year-old part-time dishwasher and flower arranger tells The Nut Graph.

The unit Salimah was offered is located in Taman Bukit Segar, Cheras, which is quite a distance from her children’s school in Ampang Jaya.

“I’ve never seen the house, yet the irony is that I’ve been receiving the assessment bill for the unit from the Ampang Jaya Municipal Council (MPAJ) for the past few years,” says Salimah, who, along with about 200 families, lives in the tattered longhouse settlement in Kampung Ampang Campuran, Ampang Jaya (see also Picture Gallery).

Many of the residents were transferred from Kampung Belacan, Lembah Jaya, Pandan Indah and Kampung Tengah, and some have stayed here for more than 18 years.

Salimah and her children“Life is hard here. The house is falling apart and my family survives on eggs, kicap and rice,” Salimah says tearfully.

Lost in transit

Her plight is shared by several thousands of people who were forced out of their homes and moved into longhouses when their squatter settlements in the Klang Valley were demolished in the1980s and 1990s. The resettlement was supposed to be temporary: the longhouses were meant as a stop-gap measure while waiting for low-cost homes to be built.

But they have taken on an air of permanence.

Klang Valley is believed to be home to the highest number of longhouse settlements in Peninsula Malaysia (unfortunately, official statistics on longhouses are not available). When Kuala Lumpur and its surroundings expanded in the early 1980s, many were forced out and settled in longhouse projects. They were supposed to stay there for a period of between six months and two years, but for many, the wait has stretched to over a decade. The largest longhouse settlement in Klang Valley is in Jinjang Utara, which houses about 7,000 people.

“Longhouse residents are like abandoned people in transit for years because of government policies and housing developers having to push for their projects,” says Tan Jo Hann, president of the Community Residents Association of Selangor and Federal Territory (Permas).

Tan has spent over 25 years working on urban poor, land and housing issues.

The longhouse project was abolished by the federal government in 1996. Selangor — which has settlements in Setia Wangsa, Ampang Jaya, Rawang, Setapak, Bukit Antarabangsa, among others — has stopped the practice, but longhouses continue to be built by the Kuala Lumpur City Hall.

The supply of low-cost houses was set on an upward curve when the government introduced a policy in 1982 requiring all housing developers to set aside 30% of a project for low-cost housing, cross-subsidised by the sale of medium-cost and high-end houses.

Tan Jo Hann, president of PermasThe quota varies for each state. In Selangor, it is set at 20%. But even this has not been rigidly followed, as developers can apply for waivers in certain cases and build low-cost houses in a different area or at a later date.

Whatever the case, supply is not the problem. According to statistics provided by the Selangor state government, as of 2006, a total of 77,349 people applied for low-cost houses, and only 44,797 were offered units, with the rest are still on the waiting list.

But a check of the Residential Property Stock Report for that year shows that 85,301 units of low-cost houses and 161,299 units of low-cost flats were available. This figure climbed to 86,621 and 179,798 units respectively as of the first quarter of 2008.

Housing issues

Selangor has more than enough low-cost accommodation to offer its displaced residents. So why are so many people still living in longhouses, or on the waiting list to buy low-cost units? And why are there so many unsold low-cost units in the state?

Many urban poor do not qualify for bank loans, while some are reluctant to move to low-cost housing projects located in remote areas that are not accessible to public transport.

Another major problem is the process of allocation of the units, which is far from transparent.

“It is not that we do not have enough houses, but the way they are designed, the location and the process of allocation is not done in consultation with the people,” Tan explains.

Low-cost housing in Ampang MewahThis mismatch has resulted in many low-cost housing projects going unsold, when in fact the demand remains.

However, things are starting to change. According to Iskandar Abdul Samad, Selangor state exco for housing, building management and squatters, the state government plans to enforce a new policy requiring developers to have their feasibility studies approved by authorities at the planning stages before the low-cost housing projects are given the green light.

“If they can’t convince the state that they can sell [the low-cost houses], we won’t approve it,” Iskandar says, adding that the viability check would include transport accessibility.

While the state is trying to ensure the constant supply of low-cost houses, the Real Estate and Housing Developers Association (Rehda) Institute has been lobbying the government to take over the role of providing low-cost houses.

The association claims that private developers are unable to cope with rising construction costs. The price of low-cost houses is still capped at a maximum of RM42,000 per unit, which means developers end up subsidising costs of between RM18,000 and RM28,000 per unit.

With the economic downturn and rising inflation rates, many housing projects are expected to be hard hit. Yeo An Thai, 36, who is in the construction industry, tells The Nut Graph that at this rate, it is better for the developers to pay cash to the government in lieu of delivering low-cost houses.

But housing rights campaigner Tan objects to the idea.

“It has to be both parties, to ensure adequate housing for the poor. [The developers] complain of losing money in developing low-cost houses, but what about the millions they make from the medium- and high-cost housing projects?”

Graft and lack of transparency

While the debate of state versus private responsibility continues, the failure of the current system to respond to the housing needs of the urban poor is being ignored. Add to this mix the spectre of corruption, with tales remaining rife of low-cost housing applicants being harassed by intermediaries for under-the-table money to “expedite” their applications.

An application form for low-cost housing. Only Malaysians with household income of below RM2,500 are allowed to apply, but have to contend with a long wait

“Back in 2001/2002, a person approached my husband and said that if we wanted a low-cost house, we needed to pay RM8,000 under-the-table money,” says Wong Choi Kuan, treasurer of Permas.

Wong’s husband refused, but she believes many others have anteed up, paying anything between RM5,000 and RM8,000 to get a unit.

This practice is unfortunately an open secret among low-cost homebuyers and those involved in the housing industry, caused, Yeo says, by the big gap between the capped price for low-cost houses and the market price.

At the National Summit on Urban Poor and Low Income Groups in Kuala Lumpur in July 2008, Rehda Institute chairperson Datuk Eddy Chen suggested a way to combat this: by restricting the sub-sale of low-cost units for a number of years to prevent irresponsible parties from making a quick buck.

Chen’s suggestion finds favour with Iskandar, who cites the manipulation of data and lack of transparency in allocating such homes as the root of the problem.

One of the things put into place by the new state administration is the discontinuation of the previous practice of allocating a certain number of low-cost units to state assemblypersons, councillors and some state MPs to deliver to their constituents.

Now, the selection of eligible buyers is wholly conducted by the Selangor Housing and Property Board and the State Housing, Building Management and Squatter Committee headed by Iskandar, and applicants are picked on a first come, first served basis.

Iskandar Abdul Samad, Selangor Exco for Housing, Building Management and SquattersIskandar said they are also mulling the possibility of publishing in the media the names of those who have been offered units, to ensure transparency.

As for those who are unable to purchase low-cost units because of low income levels, the alternative could be to build council homes to house them using the rent-and-sell concept, Iskandar says.

The federal government has also stepped in to help those without fixed incomes to own affordable houses through the Housing Credit Guarantee Scheme (SJKP), which was set up following the tabling of Budget 2008.

Under the scheme, borrowers can obtain housing loans to purchase low- and medium-cost houses. The fund, which initially started with RM50 million, will be increased to RM100 million following the tabling of Budget 2009 by Prime Minister Datuk Seri Abdullah Ahmad Badawi on 29 Aug 2008. About 40,000 borrowers are expected to benefit from this facility.

Another move in the right direction is the setting up of the Urban Poor, Land and Housing Task Force headed by Permas, the Marginalised Peoples Network (Jerit), and the state government, to deal with over 20 controversial cases involving housing rights.

Iskandar is optimistic that about 75% of the cases may be resolved by the year’s end.

However, while it appears a lot is being done to tackle the mismatch between the supply of houses and the needs of the urban poor, for those on the ground like Salimah, change cannot come fast enough.

One Response to “No place like home”

Low-cost housing is the responsibility of the government, not the developers. Squatters exist due to poor planning and enforcement by the government. The government tries to evade its responsibility by throwing the burden onto the developers and eventually the house buyers.

We should go back to basics. The Selangor master plan should identify land for housing, location of low-cost schemes, transport terminals, SME clusters, business centres, and so on. The idea is that low-cost schemes should be located near centres of employment so that the residents there do not need to travel a long distance to work – preferably they can reach their work place on foot or bicycle.

Construction of low-cost accommodation should be undertaken by the government. It can be houses or flats (which is cheaper landwise than houses). They can raise funds by charging a premium or development charge onto the developer who applies for planning approval for his or her project. This charge should include the cost of providing for public transport facilities.

Developers should only be allowed to operate on a build-and-sell basis. This will force them and their financiers to think through the viability of their project carefully and should reduce considerably the problem of abandoned housing projects.

In conclusion, we need to provide not only low-cost housing but the opportunity for the poor to access jobs nearby.